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Exclusive – Global automakers wary of China certification shift

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BEIJING Some global automakers are worried that China is pushing its weight around as the world’s biggest car market – by enforcing its own, often outdated, vehicle certification standards on foreign cars.

China previously allowed global brands to sell cars without local certification in many cases, as long they were approved under international standards. Chinese rules essentially apply older standards to features such as bumper strength, brake performance and the size and positioning of lamps and mirrors.

Global car makers say the move to enforce local standards more rigorously highlights the unpredictability of doing business in China, is a step back in technology and could mean costly re-designs and delayed new car launches.

In one instance, Chinese regulators made an issue of the position of a Nissan Motor (7201.T) car’s fog lamps – something that has since impacted other automakers, people with knowledge of the matter said.

Shifting a lamp by a few centimetres can mean re-designing exterior body panels, investing in stamping dies and lighting assemblies, and delaying planned launches by more than a year, said people close to the Japanese Automotive Manufacturers Association (JAMA).

“It’s an inconvenient and sudden departure from the status quo,” said an executive at a leading international automaker. “We’re essentially being asked to redo some aspects of new vehicles in China using outdated standards. This may cost us critical time and money.”

To be sure, compliance won’t break the bank, but car makers are concerned they may be sacrificing technical advances as China’s standards can lag global norms by as much as a decade.

“They can enforce whatever standards they want. The question is: are those standards high enough to protect consumers,” said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. “People think China does not have proper standards and that’s why the car quality here is lower.”

STANDARDS LAG

As European certification standards – the de facto global norm – have evolved in line with advances in technology, China’s have lagged behind. Foreign car makers say this is in part because China wanted to help protect its domestic automakers from competition.

Feng Yi, director of the China Automotive Technology and Research Center (CATARC), which oversees the National Technical Committee of Auto Standardization, said there was no aim to protect local producers or hinder foreign automakers. In emailed comments to Reuters, he said local standards had lagged those from Europe, though China was now speeding up setting its own standards, based on European rules.

“However, because it takes quite a long time to set up or update standards and prepare new auto products, new standards will still be one step behind compared with (Europe),” he said.

After a decade of double-digit growth, helped by subsidies and other policy measures, China’s light vehicle sales slowed to single-digit growth last year, and research firm JD Power predicts that will likely be the norm for the next few years.

“We’ll see more of this as the market slows … to make sure state-owned and domestic automakers will be solvent,” said John Humphrey, a JD Power consultant. “Without that, a lot of those companies won’t be able to withstand the raw market forces.”

A spokesman for Chinese automaker Zhejiang Geely [GEELY.UL] said he did not know if the shift was benefiting local car makers. “Geely Auto’s design, R&D and production facilities fully comply with standards and certification in China and in overseas markets where our vehicles are sold,” he said.

INNOVATION HURDLE

In another case, Honda Motor (7267.T) was told by Chinese regulators that sensor frequencies in one of the on-board diagnostic systems monitoring engine and transmission performance and tyre pressure on one of its new models did not meet their certification standards.

Spokespersons for Nissan and Honda declined direct comment, but said they support the JAMA playing a lead role on this issue. A Toyota spokesman declined to comment.

The JAMA sent a delegation to Beijing in November to voice its concern to the CNCA department that deals with automotive certification, three people close to the JAMA said. Feng at the CATARC said he was not aware of any such meeting.

The European Automobile Manufacturers Association (ACEA), which represents firms including Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE) as well as top U.S. manufacturers, says it prefers its car makers to try to resolve issues themselves case-by-case.

China representative Dominik Declercq said the ACEA welcomed signs of China embracing the rule of law, and “less arbitrarily” than before, but has concerns about the impact on future sales.

“It’s not hard to see how (this) might be harmful to the introduction of innovative products to China,” he said. “We do sense (global automakers) collectively may face new hurdles.”

(Reporting by Norihiko Shirouzu; Editing by Ian Geoghegan)


Source: R-Business

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India's next rate cut more likely after government presents budget

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MUMBAI Reserve Bank of India is expected to wait until after the government’s annual budget statement at the end February to decide on whether to cut interest rates further, rather than take the plunge at a policy review on Tuesday.

Having cut the policy repo rate INREPO=ECI by 125 basis points in 2015, Reserve Bank of India Governor Raghuram Rajan warned on Friday against straying from the path of fiscal consolidation or relaxing the fight against inflation.

The timing of Rajan’s safety first message wasn’t lost on analysts.

The government is due to deliver its 2016/17 budget on Feb. 29 along with plans on how it intends to stagger a 24 percent increase in salaries and pensions for some 10 million current and former government employees.

If the fiscal deficit stays within reason, then inflation trends over coming months could also favour hopes for lower interest rates.

Oil prices near 13 year lows and seasonally subdued food prices should help bring inflation down to the RBI’s target of below 5 percent by March 2017, after it hit a 15-month high of 5.61 percent in December.

“Inflation will come off in the middle of the year and there will be an opportunity to cut either inter-meeting or in April,” said Radhika Rao, an economist for DBS Bank in Singapore.

“Whether the government’s fiscal deficit is adjusted higher and how the pay commission proposals are implemented will be important factors for the RBI to consider.”

Only two of 39 economists polled by Reuters expect the Reserve Bank of India to cut interest rates on Tuesday. The rest predicted the policy repo rate would be left unchanged at 6.75 percent.

But more than half of them saw scope for at least a 25 bps rate cut by the end of June thanks to the reduced inflationary pressures, with saying the reduction could come as early as March.

For now, the RBI is waiting to see the benefits of earlier rate cuts filter through, and Tuesday’s policy statement could contain another call for commercial banks to lower their lending rates further after most reduced them by only around 60 bps last year.

Keeping rates on hold at the last policy review in December, the RBI reiterated that it remained on an “accommodative” path that will help give more momentum to economic growth.

But there is growing impatience with Prime Minister Narendra Modi’s government to deliver stronger growth, as vaunted economic reforms keep getting delayed.

The headline growth rate looks very creditable at projected 7.2 percent for the year ending in March. But private sector investment remains weak, and India needs sustained growth of around 8 percent to generate jobs for its growing workforce.

Analysts expect India’s budget to slightly raise fiscal deficit targets to free up money for investment in infrastructure projects, while keeping subsidies and other spending under control.

(Editing by Simon Cameron-Moore)


Source: R-Business

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Supermodel Cindy Crawford, turning 50, denies plans to retire

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NEW YORK Supermodel Cindy Crawford on Monday denied reports that she planned to retire from modeling this month, saying she had made no final statements and that her “retirement” was a running joke in her family.

Crawford appeared to suggest in an interview with United Airlines magazine Hemispheres last week that she would quit modeling when she turns 50 on Feb. 20.

But on Monday she wrote on her Instagram page that “not all headlines tell the whole story.”

“Every year, I tell my kids I’m retiring. It’s a running joke in our family. And yet every year, opportunities pop up that really excite me. While it’s true that I’m eager to shift my focus a bit to concentrate on my businesses, friends and family — I’m not making any final statements,” Crawford wrote.

“I have loved being part of the fashion industry for the past 30 years — and if that time has taught me anything, it’s this: never say never,” she added.

Crawford became one of the first and best-known supermodels in the 1980s and 1990s, appearing on runways for the likes of Chanel, Christian Dior and Valentino.

She stepped back from full-time modeling some 15 years ago, but is currently the face of French fashion house Balmain’s spring/summer 2016 fashion campaign along with fellow veteran supermodels Naomi Campbell and Claudia Schiffer.

(Reporting by Jill Serjeant; Editing by Cynthia Osterman)

Source: R-HMovies

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